Oct. 30 (Bloomberg) -- Novo Nordisk A/S is earmarking as much as $2 billion for takeovers in the next 12 months as the financial crisis forces cash-strapped biotechnology companies onto the market, Chief Financial Officer Jesper Brandgaard said.

``We are more or less able to finance in cash acquisitions within the $1 billion to $2 billion range,'' Brandgaard said in a phone interview from Copenhagen. ``We think there will be opportunities in biotech which we haven't seen before.''

The worldwide credit crunch has sent stocks plunging, with shares in higher-risk industries such as biotechnology among the biggest losers. Companies in the Bloomberg World Biotechnology Index have lost almost one-fifth of their value in less than three months, with the 35-member benchmark dropping 19 percent since hitting a six-month high of 161.36 on Aug. 14.

Novo Nordisk will end the year with free cash flow of about 9.5 billion kroner ($1.67 billion), the Danish drugmaker said earlier today. That's higher than an earlier estimate of 8.5 billion kroner.

Bagsvaerd-based Novo Nordisk won't step up its share buyback program, preserving the funds available for takeovers, Brandgaard said. The company has about $1.5 billion in cash, he said.

Novo Nordisk rose 6 kroner, or 2 percent, to 300 kroner in Copenhagen. The shares have fallen 10 percent this year.

Drugmaker Cash

Major drugmakers have on hand an average $7.5 billion in funds that can be used for deals, according to Datamonitor.

Alternative financing is dwindling, leaving companies little choice but to court drugmakers. Venture-capital funds cut their investment in both European and U.S. biotech companies by more than one fifth in the first half of 2008 compared with a year earlier, said Julia Schueler, a senior biotechnology analyst at Ernst & Young in Mannheim, Germany.

Smaller drugmakers, struggling to fund the development of new medicines, are approaching Novo Nordisk's top executives.

``The organizational contact level is moving up,'' the executive said. ``We're seeing a completely different world order sinking in to the minds of management and boards of biotech companies.''

Novo Nordisk, the world's biggest insulin maker, will focus buying on companies that concentrate on diabetes and inflammatory diseases, Brandgaard said.

Earlier today, Novo Nordisk raised its 2008 earnings forecast after gains in the U.S. dollar helped third-quarter profit beat analyst estimates. Operating profit this year will climb by 32 percent to 35 percent over 2007's 8.94 billion kroner, compared with an earlier forecast 22 percent to 25 percent growth.

Net income climbed to 2.66 billion kroner, or 4.30 kroner a share, from 2.18 billion kroner, or 3.43 kroner, beating the median estimate of 2.29 billion kroner in a Bloomberg survey of 10 analysts.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzkop@bloomberg.net

Last Updated: October 30, 2008 13:03 EDT